Executive Compensation Policy Including Performance-Linked Compensation

「Based on approval at the 77th Annual General Meeting of Shareholders held on 21 June 2024, the company introduced a restricted stock remuneration plan as a new remuneration plan for eligible directors and executive officers who do not concurrently serve as directors, with the aim of providing incentives to achieve sustainable enhancement of corporate value and further promoting value sharing with shareholders. “Eligible directors” means directors other than outside directors, and “eligible directors and other officers” collectively means eligible directors and executive officers who do not concurrently serve as directors.」

「We would like to revise the annual remuneration limit for directors to no more than ¥600 million, including no more than ¥80 million for outside directors.」

「The company grants restricted stock to directors other than outside directors as non-monetary remuneration and other remuneration, with the aim of providing an incentive to achieve sustainable enhancement of corporate value and further promoting value sharing with shareholders.」

「Performance-linked remuneration and other components are cash remuneration reflecting performance indicators, intended to heighten awareness of improving performance in each fiscal year. A portion is paid monthly together with base remuneration, and another portion is paid annually at a specified time as a bonus. Target performance indicators and their target values are set to align with the short- and medium-term management plans. In response to changes in the operating environment, the Board of Directors reviews them as appropriate after deliberation by the Nomination and Remuneration Advisory Committee.」

「The company’s basic policy is to establish a remuneration structure for directors that functions sufficiently as an incentive to achieve sustainable enhancement of corporate value and to set remuneration for each individual director at an appropriate level based on the director’s responsibilities. Specifically, remuneration for executive directors consists of base remuneration as fixed remuneration, performance-linked remuneration and other components, based on the executive remuneration regulations and other applicable rules. Outside directors, who are responsible for supervisory functions, receive only base remuneration in light of their duties.」